Fixed Assets

NEPN/NSBA Code: DIF

This policy establishes the minimum cost value ($10,000) that shall be used to determine the capital assets, including infrastructure assets, that are to be recorded in the School’s/Town’s annual financial statements in order to comply with the requirements of GASB Statement No. 34.

This policy also addresses other considerations for recording and depreciating fixed assets in order to comply with the provisions of GASB Statement No. 34

A. Capital Asset definition:
Capital assets will be defined as tangible and intangible assets that have initial useful lives that extend beyond a single reporting period.
B. Capitalization method:
All capital assets will be recorded at historical cost as of the date acquired or constructed. If historical cost information is not available, assets will be recorded at estimated historical cost by calculating current replacement cost and deflating the cost using the appropriate price-level index.
C. Capitalization thresholds:
The Town establishes the following minimum capitalization thresholds for capitalizing fixed assets:
  1. Land and improvements $1
  2. Buildings and improvements $1
  3. Machinery/equipment/vehicles $10,000
  4. Infrastructure $1
  5. Furniture & equipment $10,000
Detailed records shall be maintained for all fixed assets above the established thresholds.
D. Infrastructure assets:
In accordance with GASB Statement 34, the School Department will record, at a minimum, “major” infrastructure assets as defined in Statement 34 that were acquired, constructed or significantly reconstructed, or that received significant improvements after June 30, 1980. Other infrastructure assets may be capitalized as deemed appropriate. The School Department does not intend to use the “modified approach” to record infrastructure.
E. Other assets:
Detailed records shall be maintained at the discretion of the Superintendent for all items below the capitalization thresholds that should be safeguarded from loss. These items will be part of the annual physical inventory discussed below. These items include technology equipment that fall below the established thresholds and any other assets specified by the Superintendent.
F. Depreciation and useful life:
The Finance Director will assign an estimated useful life to all assets for the purposes of recording depreciation. The attached “Suggested Useful Lives” schedule will be used to establish lives for most assets. Asset lives will be adjusted as necessary depending on the present condition and use of the asset and based on how long the asset is expected to meet current service demands. Adjustments should be properly documented. Depreciation will be recorded based on the straight line method using actual month convention.
G. Safeguarding and controlling fixed assets:
All machinery and equipment, vehicles and furniture that meet the capitalization threshold will be assigned an asset number. As fixed assets are purchased or disposed of, the Department Head in custody of that asset will be responsible for preparing a fixed asset data sheet, which will then be forwarded to the Finance Department to ensure proper recording. A physical inventory will be taken annually on or about June 30 and compared to the physical inventory records. The results will be forwarded to the Finance Department where appropriate adjustments will be made to the fixed asset records.

Capital Assets of Local Governments
Suggested Useful Lives:

Asset typeExamples        Depreciable Life in Years
Non-Infrastructure  
Furniture,office equipmentDesk,tables,chairs     5
Computer hardware    Monitor,CPU,Laptop,printer 5
Computer HardwareNetworks 5-10
Computer SoftwareInstructional, Other short term 5-10
Computer SoftwareAdministrative: Long term 10-20
Telephone equipment  10
Radio/Communications equipmentMobile/portable radios 10
Business MachinesFax, Duplicating, Printing 10
Copiers  5
Audio Visual EquipmentProjectors, Cameras (Still & Digital) 10
Musical InstrumentsPianos, String, Brass etc 10
ArtworkCollections 5-7
Library booksCollections 5-7
Recreational/Athletic equipmentWeight machine,mats,golf carts, treadmills,tackling sled,pitching machines etc 10
Motor Vehicles
 
Cars & light trucks  5-8
Busses    School, City 10-12
Heavy construction EquipmentBackhoes,trucks,dozers,front- end loaders,tractors 10
Fire Trucks  15
Buildings  
Buildings - Temporary  15
Buildings  40
School Buildings  50
Portable Classrooms  25
Furniture & Accessories    Classroom & Other Furniture   20
Outdoor EquipmentPlaygrounds, Radio Towers, Fuel Tanks, Pumps 20
Grounds EquipmentMowers, Tractors & Attachments 15
Machinery & ToolsShop & Maintenance Equipment, Tools 15
Custodial EquipmentFloors Scrubbers, Vacuums 12
HVAC SystemsAir-conditioners, heating Ventilation 20
Roofing  20
Interior Construction  25
Carpets  7
Sprinkler/Fire SystemsFire Suppression Systems    25
Electrical/Plumbing  30
Kitchen EquipmentAppliances 15
Engineering/Scientific equipmentLab equipment 10
Firefighting equipmentladders,hoses 10
Police Special Equipment  10
Medical Equipment  5
Traffic control equipmentStoplights 10
Land  No Depreciation
Site improvementsPaving, Flag pole, Retaining Walls, Sidewalks, Fencing, Outdoor lighting     20
Land Improvements: StructureParking lots, Sidewalks, Bus Ramps, Fencing, Running Track, Flagpole 20
Land Improvements: Ground WorkGolf Course, Ball Field, Park, Landscaping 30
Land Disposal Systems  25
Sewage Treatment Plants  25
Infrastructure  No Depreciation
Easements  25
Water Systems  25
Sewage Disposal Works System  25
Waterway  No Depreciation
Levees and Canals (unlined)  30 
Canal Lining  
Dams  
Concrete  50
Steel, Sheetplie  30
Earthen Embankment  No Depreciation
Roads  
Paved  40
Asphalt - Rural  40
Asphalt - Urban  20
Non-Paved  50


Adopted:  March 25, 2004